South Carolina Mandates Home Insurance Education, Disclosure
A provision in the bill early on to increase the amount available for grants for property storm mitigation efforts did not survive. The provision would have provided $1.6 million in additional funding for the Safe Home South Carolina program by directing that more of premium taxes levied against insurers go to the grant program.
To help increase coverage availability in coastal areas, the law provides insurers with an incentive to write more coastal business.
Insurers may receive a 25 percent premium tax credit for any full coverage homeowners business (including wind and hail coverage) they write in coastal territories.
The main thrust of the law is education. It instructs the insurance regulator to do more to provide market assistance and educate the public about home insurance. These efforts are to include an annual public hearing in the seacoast area to provide information and an opportunity for consumers to offer input concerning the rates, territory, and other issues regarding the South Carolina Wind and Hail Underwriting Association.
The law orders the insurance director to publish an annual report on the status of the coastal property insurance market including the status of the South Carolina Wind and Hail Underwriting Association and an update on grants issued under the storm mitigation program.
The insurance department must also post on its website for consumers information on the mitigation discounts and credits available including a summary of those offered by the 20 largest homeowners carriers by premium volume; premium comparison information; information to assist consumers in finding insurers writing property insurance coverage in their area; a listing of licensed property/casualty producers in their area; and information on catastrophe savings accounts.
Insurers are now subject to additional requirements, too. With all new and renewal property insurance policies, they must alert policyholders to all premium discounts, credits, other rate differentials, or reductions in deductibles for properties available for mitigation efforts. This notice should also include information on available catastrophe savings accounts and describe what measures policyholders may take to reduce their windstorm premium.
All insurers must notify a residential property insurance applicant or policyholder whether the insured has coverage for flood or mold. The disclosure must also state that insurance is available through the National Flood Insurance Program and that excess flood insurance may be available through an additional policy.
Insurers must explain the distinction between replacement cost for losses and actual cash value, the use of depreciation in determining payment for losses, and that the policy may contain time limitations for repairs to be completed in order to receive full replacement cost for the losses.
Insurers must also inform applicants and policyholders that they may have the option to increase the deductible and thus lower the potential premium and whether a separate deductible is required for hurricane, wind, or named storm damage, as opposed to some other type of loss, with an example illustrating how the deductible works.
With every commercial property policy, an insurer must include a notice that a reduction in premium may be available if the policyholder has taken steps to prevent or reduce damage from windstorm and that the policyholder may contact an agent, broker, or the insurer for additional information.
The notice provisions apply to policies issued or renewed after December 31, 2014.
In other legislative action this year, South Carolina lawmakers approved a ban on texting while driving and a law allowing insurers to provide electronic proof of auto insurance.